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Up-to-date reports of notable Delaware Chancery Court and Delaware Supreme Court decisions.

Delaware Court of Chancery Adopts Reverse Veil-Piercing

In a case of first impression in Delaware, the Court of Chancery adopted the equitable doctrine of reverse veil-piercing1 in Manichaean Capital LLC v Exela Technologies Inc., a post-merger action to enforce an appraisal valuation judgment. The opinion, partially denying a motion to dismiss, is significant for both its adoption of reverse veil-piercing and for its clear outline […]

| 5 min read

Delaware Court of Chancery: Deadlock Can be Genuine Even When Unilaterally Orchestrated

A Delaware Court of Chancery case decided earlier this year provides some useful guidance on the interpretation of LLC agreements and what constitutes a “deadlock” under Delaware law. The case, Mehra v. Teller, involved a deadlock between co-managers of a Delaware limited liability company, EOS Investor Holding Company LLC (“Holdco”) and the resultant dissolution of that company. […]

| 4 min read

Delaware Supreme Court Holds That Fraud is Insurable

In a decision that is likely to reshape directors and officers (“D&O”) policies across the nation, the Delaware Supreme Court has held that fraudulent conduct by corporate officers and directors is insurable under Delaware law. RSUI Indemnity Company v. Murdock, 2021 WL 803867 (Del. March 4, 2021). The court also held that Delaware law governs a […]

| 4 min read

Officers Face Personal Liability for Steering a Sale of Columbia Pipeline to a Preferred Buyer

The Delaware Court of Chancery in In re Columbia Pipeline Group, Inc. Merger Litigation  denied a motion to dismiss claims for fiduciary duty breach in the sale of Columbia Pipeline Group, Inc. (“Columbia”). The Court found that the plaintiff stockholders’ allegations supported the inference that Columbia’s CEO and Chairman Robert Skaggs, Jr. and CFO Steven Smith […]

| 7 min read

Sorting Through the Kettle of Fish: Delaware Supreme Court Enforces Contractual Provisions Limiting Liability to “Deliberate Fraud”

When determining whether to uphold an indemnification provision that carved out an exception for only deliberate fraud, the Delaware Supreme Court recently explained in Express Scripts, Inc. v. Bracket Holding Corp., ___ A.3d ___, 2021 WL 752744, at *1 (Del. Feb. 23, 2021), that “[a] deliberate state of mind is a different kettle of fish than a reckless […]

| 5 min read

Court of Chancery finds that it lacks personal jurisdiction over employee in former company’s non-compete action

Choice of law and choice of forum clauses in employment agreements are tricky business. Even though a Delaware LLC employer may think they have strong, iron-clad selection provisions in their employment agreements, the Delaware Court of Chancery may find otherwise, as it did recently in Focus Financial Partners, LLC v. Holsopple, 241 A.3d 784 (Del. Ch. […]

| 3 min read

Tell Me Everything: How Much Information Must a Shareholder Provide to a Corporation to Inspect Books and Records Under Section 220?

The Supreme Court of Delaware recently affirmed a decision by the Court of Chancery that ordered a corporation to produce certain books and records to a shareholder, and which granted leave to the shareholder to take a corporate representative deposition under Rule 30(b)(6). The case, AmerisourceBergen Corp. v. Lebanon County Emps.’ Ret. Fund, — A.3d –, […]

| 4 min read

Chancery Rules on Equitable Fee Shifting and Indemnity Provisions in Support of Fee Shifting

On December 31, 2020, Vice Chancellor Glasscock issued an opinion regarding what he called a “novel issue” arising from cross motions for fees. The motions were supported by a contractual prevailing party fee provision which also provided for an equitable award where a party prevailed in part and lost in part. The case, Great Hill Equity […]

| 4 min read

Delaware Bankruptcy Court Provides Guidance on the Scope of The Automatic Stay

On December 3, 2020, the United States Bankruptcy Court for the District of Delaware entered an opinion in In re Extraction Oil & Gas, Inc., Case No. 20-11548 (CSS), holding that two entities (the “State Court Plaintiffs”) violated the automatic stay of 11 U.S.C. § 362(a) when those entities commenced and prosecuted litigation against non-debtor entities […]

| 4 min read

Court Finds that Seller Breached its Mergers and Acquisitions Interim Operating Covenant in Responding to COVID-19

On November 30, 2020, the Delaware Court of Chancery issued its decision in AB Stable VIII LLC v. Maps Hotels and Resorts One LLC et al., holding that the Seller had breached its covenant to operate in the ordinary course of business between signing and closing of a pending M&A transaction when it closed hotels and […]

| 4 min read